A Smart Man “Dies Like an Idiot”- He left his millions to no one.

I came across an article about a Holocaust Survivor who left his estate, that was worth almost $40 million, to no one. Yes, I said almost $40 million left to no one (insert loud gasp here!)

So, what happened to this millionaire’s estate? The state of New York is the proud owner of those millions. As I have mentioned in the past, if there is no will or trust dictating where your assets should go, the state determines where those assets will be distributed.

In this case, Mr. Blum left no instructions as he had no will or trust. He left it up to the state to determine where his millions should go. Because the state could not find any heirs, even after doing a world wide search, and the estate is unclaimed, his millions will go to the State of New York.

Mr. Blum was not a dumb man. He was smart and according to his accountant he knew how to name beneficiaries and knew what had to be done.

Although escheating to the state is incredibly rare because the laws of intestacy look for any living relative including cousins and their descendants and any one who falls under the nebulous term “next of kin,” it does happen.

The moral of this story? PLAN!

You may not own millions but you also want to ensure that whatever assets you do own are distributed in a way you want them to be.

If you want assistance in creating an estate plan specific to your needs, contact our Redwood City estate planning attorney at 650-503-3770. At the Law Office of Carmen M. Rosas, we ensure that every plan is unique to our clients and their families.

 

 

 

Your Nest Egg vs. Your Children’s Education

As many of you know, I am a HUGE (did I mention HUGE?) advocate of proper planning- whether it’s estate planning, financial planning, party planning or vacation planning. Yes, I am that person who creates an itinerary for a family vacation!

Recently, I was asked by a client about how she should start saving for her retirement while also saving for her children’s education. The conflict usually arises from the lack of financial resources to do both all while still funding daily living expenses. This client isn’t alone.

Parents become stuck between priorities and usually wind up doing nothing at all. Now, I am not a financial planner (I can refer you to one!), but I do assist my clients with sorting out their priorities to they can come up with a plan to support their family in the future.

Here are some tips to how to find a balance between saving for your retirement, having an emergency fund and saving for your children’s education.

BUILD AN EMERGENCY FUND FIRST

An emergency fund is that money you have saved for a “rainy day.” This fund should be about 3-6 months worth of expenses and used for emergencies. If you don’t have this saved, you may be required to take a loan from your 401(k) or take a personal loan. These options may subject you to penalties and taxes, which end up costing more.

SAVE FOR YOUR RETIREMENT

Once you have your emergency fund, you should begin saving for your retirement. Parents are often concerned about being selfish because by saving for retirement, they are not saving for their children’s education. This is actually the opposite. If you don’t have a retirement savings, when it is time for you to retire and your children have their own families, you won’t have any money to take care of yourself. You will then become dependent on your children to take care of you and add to their own expenses. There are student loans, scholarships and grants available for your children’s education. There are NO loans for retirement!

SAVE FOR YOU CHILDREN’S EDUCATION

This is the LAST step. Once you have your emergency stash and a growing retirement fund, THEN you can start funneling some money into your children’s education fund. If you invest in a 529 college savings plan, the earnings grow tax-free. AND, other people in your child’s life — like grandparents, godparents and generous aunts and uncles — can contribute as much as $14,000 per year (annual gift tax exclusion for 2013) to a child’s 529 plan.

If you would like to set up  a time to meet with us to discuss your plans for the future, feel free to call us at 650-503-3770  so we can sit down and chat. And because we know how important this planning is for our clients, for the first two people to call our Redwood City Estate Planning Attorney, we will give away a FREE consultation (valued at $400)! Call now and schedule your appointment- When scheduling your appointment, don’t forget to mention this post!

Don’t be a Fool this April- Plan ahead!

1300137640fZ1a4THappy April Folks!  We hope everyone enjoyed their Easter holiday (if it was celebrated)! Our office has been busy assisting clients with estate planning issues, probate hearings, child visitation modifications, writing a new e-book, working on an “Estate Planning 101” Basics seminar, working on our Vlog  and podcast series, and revamping our website! So we have been just a little bit busy!

How have you been? Have you been busy and completing your Estate Planning Homework Assignments? Have you made an appointment with an estate planning attorney in your area? (We have experienced estate planning attorneys in California, specifically Redwood City and San Jose AND we have a virtual law office to serve the rest of California 🙂 ) Are you just starting assignment #1? Don’t wait too much longer- you don’t want to be the April Fool who waited too long to create an estate plan (insert fake laugh here!).

So as promised here is some discussion about one of the Must Have Documents– a will. This scenario can apply to individuals either in their first, second or third marriage, or just have children from previous relationships; It can also be considered where there are issues of separate property and inheritance.

WHAT WILL YOU PICKReciprocal and Non-Reciprocal Wills

When thinking about your will, decide whether you and your spouse will execute reciprocal wills. Reciprocal wills are wills executed by husband and wife, which are exactly alike. This means that each will leaves the same asset(s) to the same person(s) in the same proportion. For example, Jane and John, each on their second marriage are married to one another, and each has one child from a previous marriage. They both execute wills, which leave everything to the other, and in case the other is deceased, one-half of the estate to Jane’s child and one-half to John’s child. Some things to keep in mind when deciding whether to execute reciprocal wills.

When executing RECIPROCAL wills, your spouse is free to change his or her will at any time. For example, John and Jane, each on their second marriage are married to one another, and each has one child from a previous marriage. They both execute wills, which leave everything to the other, and in case the other is deceased, one-half of the estate to Jane’s child and one-half to John’s child. Jane dies, and John inherits the entire estate. He then may change his Will to leave the entire estate to his child, and disinherit Jane’s child.

When executing NON-RECIPROCAL wills, you will need to determine what assets belong to each of you so that there is no confusion about what property each party may leave to his or her heirs. If you experience any difficulty reaching an agreement concerning ownership of your property, a pre-nuptial agreement or your state’s marital property, laws may dictate ownership of some or all of your property for you.

Your spouse is not required to inform you of changes made to his or her will.

Whether executing reciprocal wills or not, your spouse is free to change his or her will at any time and is under no obligation to inform you of the change. This means that he or she may remove your children as beneficiaries and leave their entire estate to their own children, without your permission or knowledge.

Feel free to contact our office if you have any additional questions! Enjoy this beautiful Spring weather!

The TOP 4 (MUST HAVE) Estate Planning Documents

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If you follow us on Facebook or Twitter, you have probably seen the weekly Friday “Homework” in preparing for your estate planning meeting. If you don’t follow us, you should!

So, what is this “Homework?” Well it’s basically a list of things to consider before meeting with our Redwood City estate planning attorney.

The last two weeks were 1) the financial information you should gather and 2) if you’re a parent, some things to consider when selecting a guardian (See our past post here).

In addition to our weekly “Homework” assignments, we have decided to post on the TOP 4 (MUST HAVE) Estate Planning Documents to help you stay even more organized!

TOP 4 (MUST HAVE) ESTATE PLANNING DOCUMENTS

1. Will: A will gives instructions for distributing property that you own, upon your death, through the probate process. A will is essential if you have minor children, as this is the only way you can name a guardian for them. Some wills are simple, while others may include complex planning provisions, depending on each particular circumstance.

2. Advance Health Care Directive: An Advance Health Care Directive or AHCD is a document that designates someone to act for your regarding medical care should you become incapacitated. This document will also determine if and how long you stay on life support. So, if at some point you can’t state your wishes regarding health care, someone you love and trust will be assigned to make those decisions for you.

3. Durable Power of Attorney: A Durable Power of Attorney or a DPA gives someone the authority to handle all of your finances and property should you become unable to. This document will allow a person of your choosing to sell, invest, spend and otherwise manage your finances for a specific time identified in the document. The agent you select will be able to handle everything without needed a court order.

4. Living Trust: By transferring your assets to a living trust, you are able to protect your assets if you pass away. Assets that are properly placed in a trust avoid probate- this is key and that’s why a will alone is not sufficient to avoid probate. Generally, you are the trustee for your trust and if something happens to you, you will have already named a successor trustee to handle your affairs. (You ask why is MUST HAVE in parentheses? Well, because if you don’t own property or have certain assets, you probably don’t need #4).

At the Law Office of Carmen M. Rosas, we design plans specific to your needs. Not every client is the same and not every client has the same story. We want to hear your story!

If you liked this post, subscribe, and never miss a post again. And, if you really liked it, shoot us an e-mail and request one our other handy dandy reference guides for FREE(Please let us know which ones you want!)

  • 12 Tips for Choosing a Guardian
  • Things to Consider in Selecting a Guardian

And stay tuned for our e-book, coming soon!

Always Wear Clean Underwear

underwearMy grandma used to tell me to always wear clean underwear. Not, that I had a problem changing them. 🙂

I’m sure you’ve heard this saying once before in your life! She would always ask, “What if you’re in an accident and you need assistance? What will the paramedics or life savers say if they go to help you and you have dirty underwear?!” I never understood because if I was in an accident, well I’m sure they wouldn’t be concerned with what my underpants look like. (That’s for another blog!)

My reason for bringing this up is this: what happens if you are in an accident? If you’re incapacitated? What happens to your kids?!

Imagine being out on a date with your significant other. Your children (ages 7 and 4) are home with a sitter. You leave the emergency contact for the sitter- should anything happen she is to call you or your spouse, call grandparents, or call 911 if its an emergency.

On your way home from dinner, both you and your spouse are in a horrible car accident. Your spouse doesn’t survive and you’re in a coma. What happens now?

Its time for the babysitter to go home. No one can get a hold of you. The sitter calls the grandparents but they just so happen to be out of town tonight. She tries to reach the neighbor but no ones there. She waits, and waits, and waits.

She gets worried and calls 911. The police arrive and they contact local hospitals only to find out about what happened. Again, what happens now??

The police call Child Protective Services to come get the kids. The babysitter offers to stay with them, but the police state that she doesn’t have the authority to care for them. Your children go with the stranger from CPS. They are frightened and scared.

Now they wait until someone comes to get them- this could take a long time as there is a process to have a guardian appointed.

This is what happens if you don’t have a will. This is what happens if you’re not wearing clean underwear.

What would happen if you had a will and had appointed a guardian? If you had prepared for the “What Ifs?”

The babysitter would have had a copy of that will with the emergency information you gave her. The will would state that your neighbors, whose children are the same age as yours and whom your children know and care for, are your children’s guardians should anything happens to you or your spouse. It would have their contact information. The police would have called them and explained what happened. Your children would have gone with your neighbors- to a safe place with people they know and with people who care about them.

I can’t explain how important it is to have a will and appoint a guardian. Even if you feel like you don’t own a lot of assets or have any property, your biggest asset is your children! If you do only the bare minimum, throw on clean underwear and create a will appointing a guardian for your minor children.

If you want assistance creating a will or working with our Redwood City estate planning attorney to create a Child Protection Plan, send us a note or browse our blog some more, follow us on Twitter or Facebook.

And if you shoot us an email at carmenrosaslaw@gmail.com, we will be happy to send you our FREE “Top 10 Points to Selecting a Guardian.” (Don’t worry we won’t sell or give out your information. Promise.)

Tight Budgets Need Quality Representation

You want a divorce but don’t know how to manage with an already tight budget. Or maybe you need help with a custody issue but are worries about the cost of hiring a lawyer. To be honest, hiring an attorney is just simply more than you can afford right now. Well, good news- there is light at the end of the tunnel.

Whether Limited Scope Representation is right for you, depends on how complicated your issue is. Often times clients don’t need to hire on an attorney for the full range of services. At the Law Office of Carmen M. Rosas we work with our clients to package services that not only fit the needs of the client, but their wallet too.

Some examples of matters we handle under a limited scope representation include:

  • Drafting of Marital Settlement Agreements
  • Custody/parenting plan requests, hearings, and negotiations
  • Department of Child Support Services (DCSS) hearings
  • Settlement Conference
  • Non-DCSS support modification requests and hearings- Request for Orders

When representing our clients in limited scope, we prepare a fee agreement stating exactly what services are included in the cost. This avoids any confusion as to what is included and what is additional to the cost quoted. And, if there is a hearing in which an attorney will be present, we prepare the Notice of Limited Scope for the Court so they know our attorney is representing you at that hearing only.

“Does hiring an attorney in limited scope mean I can’t hire the attorney for full services?”- No! The limited scope representation is usually a starting point for many clients. Sometimes, if their budget permits or legal issue requires, clients will hire on our attorneys for the full range of services our office provides.

If a client does decide to hire our attorney for more comprehensive representation, we simply draft a new fee agreement stating such.

Getting Help– at the Law Office of Carmen M. Rosas we have a compassionate and experienced attorney in Redwood City and San Jose. Contact Carmen Rosas today for knowledgeable and trustworthy representation. Call us at (650) 503-3770 or e-mail us at carmenrosaslaw@gmail.com

You Don’t Have to Be Elizabeth Taylor….

Liz and her husbands

Liz and her husbands

You don’t need to be Elizabeth Taylor to be on your second, third, or even fourth or fifth marriage. If you have had more than one spouse, you have special estate planning needs, especially if you have children with each spouse. If you avoid these issues, it is almost certainly a way to create a less-than-desired result in the event of illness, incapacity, or death. The best way to have a smooth transition upon disability or death is to create a comprehensive strategy before you aren’t here to execute the papers.

Remarriage may result in cordial, but often not close, step relations. Frequently, such people thrown together by marriage simply tolerate each other until the biological parent dies or becomes disabled, or divorce occurs.

On the death of the biological parent, what happens? If proper estate planning isn’t done, the surviving spouse and step-parent has the option to take all that you intended to leave to your biological child.

By working with an estate planning attorney, you can ensure that both your new spouse and your children receive what you want them to. This can be done through either a prenuptial agreement and/or a fully funded trust (new post coming soon regarding “funding”).

Contact our San Jose, Fremont, or Redwood City Estate Planning Attorney. We will be more than happy to help you create the plan that best suits your needs or update the one you currently have.

“My parents aren’t getting any younger. How do I talk to them about Estate Planning?”

It’s Monday! That means its the start of a new “work” week and time to get things done!

I was talking to a client last week (let’s call her Cristina), a wife and mother of two young children. We were getting her estate plan executed. At the end of our meeting she said, “My parents aren’t getting any younger. How do I talk to them about Estate Planning?” Cristina continued on to tell me how she knew it was important, but couldn’t find a way to begin the discussion with her parents.

Aging-Parents

Cristina isn’t alone. There are thousands, possibly millions, of people who have reached retirement age and still don’t have estate plans. As a young professional, starting a family of your own, it’s important for you to create an estate plan for your family but it is also very important to make sure your parents have one.

I came across this article this morning from the Guardian Fiduciary Services on the 25 Best Questions to Ask Your Aging Parents. Although this isn’t a full and complete list, its a starting to point to get your parents discussing their plans in regards to estate planning.

When discussing estate plan options with your parents and their plans, it’s important to emphasize the importance of THEIR wants and desires- you and your siblings (if any) want to know how to distribute their hard earned assets in whatever way they want.

It may be hard at first, but GET TALKING! Use the questions above to open up a dialogue. You know your family’s dynamics best, but be sure that everyone that needs to be included in the conversation is present, or at least knows whats going on.

Do you have any suggestions on how to begin this conversation? What has worked for you? We look forward to your feedback!

And if you want to have a one-on-one chat with our San Mateo County, Alameda County or Santa Clara County attorney, feel free to send us a note.

In the middle of getting a divorce? You’re limited in regards to changing your Estate Plan.

Did you know that while you are going through a divorce, there are some things you are limited to doing in regards to your estate plan.

decree Aside from the ATROS (Automatic Temporary Restraining Orders) in the Summons of your divorce paperwork, you are limited in what you can change in your estate plan.

Here is what you can do:

  • Create, modify, or revoke a will.
  • Create, but not fund, a new single settlor revocable or irrevocable trust.
  • If in the usual course of business or for the necessities of life, transfer, encumber, hypothecate, conceal, or in any way dispose of any property, real or personal, whether community, quasi-community, or separate.
  • Execute and file a disclaimer.

Here is what you can do as long as your Spouse/RDP had notice:

  • Revoke a revocable trust. Follow revocation terms of trust exactly
  • Revoke a transfer to the beneficiary of a “non probate transfer.” A “non probate transfer” includes primarily individual retirement accounts (IRAs) and life insurance. You can only revoke life insurance if child support or spousal support is not at issue.
  • Eliminate a right of survivorship for property (joint tenancy or community property with right of survivorship).

In all of these cases, notice must be filed and served on the other party before the change takes effect.

If what you want to do doesn’t fall within these two categories you will either need to get your Spouse’s/RDP’s consent or a court order depending on the circumstances.

“Intangible” Estate Planning– its not in the paperwork

Will

Trust

Revocable Trust

Health Care Directive

Power of Attorney

You have probably heard these words a million times when it comes to estate planning. Those words are key in estate planning. They take your assets and distribute it to whomever you want in any amount you want, upon your death. And all of those documents are valuable and will be used and updated over your lifetime.

But, what about the intangible things you have accumulated over your life time?! How do you pass those on??

Here are some words that you should consider when you sit down to plan your “intangible estate”:

Values: Most of us have values and principles that we would like to pass on to our children. If you couldn’t see your children to adulthood, how would you pass on those values to them? For example, what is more important- money or health? Who would you consider your role model and why? Of all the things you have accomplished in your life, what gave you the most satisfaction? These are all things you can write down and keep with your tangible estate plan.

Personality: You know your children better than anyone else- their strengths, their weaknesses. If you were not around to raise you children, who could “click” with their personalities and help with their emotional needs?

Education: Do you have book smarts? Street Smarts? Common Sense? What is most important to you? How would you convey the importance of education to your children?

Passion: What issue or issues are you most passionate about?  Why do you care so deeply about these particular issues?  Would you expect your children to pursue a career they were passionate about or choose one that paid them well regardless of their personal interest or commitment? How do you see your dedication to these issues furthering the greater good?

Legacy: Do you know where your grandparents came from? Great grandparents?  Have you taken the time to write this information down for your children so they have a sense of tradition and family history?  What do you want your children to remember most about you? Have you thought about your legacy and what you want to leave behind for your loved ones and future generations, beyond the material things you’ve acquired? Any words of wisdom you have to pass on to them?

Traditions, story telling, heritage- are all things we might think of but are not included anywhere in our estate plan.

Think about these words and what is important to you, jot somethings down, it will help pass on your intangible estate and even better will help guide the guardian of your children should you pass before they become adults.

And, when you’re ready, set up an appointment with us for a planning session. It is never too early to prepare! Schedule a planning session with us by visiting our website, creating an account and scheduling an appointment online, or calling us at 650-503-3770.

Visit our estate planning attorney in San Mateo County, Santa Clara County or Alameda County.